Exercise 2 15 points We consider a 2 period binomial model for a stock S The price of the stock at t = 0 is So = $10 We assume u= 1.1 and d=0.9. A risk free bond is worth Be = $10 for all t Question 1 12 points) Compute the risk neutral probability p Question 2 [2 point) What is the probability that the stock price goes from $10 at t=0 to above $9.5 at t=2? Question 3 [3 points) Compute the expected value, at time t = 2, of the portfolio II2 = {S2 + B2) Question 4 13 points) Compute the price at t = 0 of a European call on the stock S with strike price $9.50 and expiring at t = 2 . Question 5 13 points| Compute the price at t = 0) of a position created by buying 10.5-strike European call on the stock and a 95-strike European put on the stock, both expiring at t = 2 Question 6 2 points What is the name of the synthetic position in the previous